Contemplating Doha Failure, WTO Members Look to Paris Meeting for Way Forward

25 May 2011

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As WTO members contemplate the real prospect of failure in the decade-long Doha Round of global trade talks, they are looking to a meeting of trade ministers in Paris on Thursday for signs of a way forward.

Ambassadors to the WTO in Geneva have been exploring - thus far without success - potential options for salvaging agreements on individual issues within the wide-ranging negotiations, instead of the comprehensive accord that had originally been planned for. The woes of the Doha Round featured prominently in discussions last week among trade ministers from Asia-Pacific Economic Cooperation (APEC) countries in the US state of Montana last week.

The APEC ministers held back from giving up on the Doha Round negotiations. But a statement they adopted went beyond the forum's standard ritual call for concluding a Doha agreement within the year. Ministers expressed "collective deep concern regarding the difficulties confronting the Doha Development Agenda," and agreed that since gaps were "unbridgeable" in many key areas of the talks, "only a major substantive breakthrough in the negotiation" could break the deadlock. They appeared to open the door to possible ‘Plan B' approaches that fall short of a comprehensive Doha accord, directing "negotiators to review urgently all options, in light of the development dimension as mandated, and to work with all WTO Members to find a path forward."

The ministers also went out of their way to praise the WTO and the rules it embodies as a bulwark against protectionism and a source of growth and development. They agreed to "uphold the primacy of the multilateral trading system and reaffirm that this strong, rules-based system is an essential source of sustainable economic growth, development, and stability."

WTO Director-General Pascal Lamy went to Big Sky, the Montana ski resort where the APEC meeting took place, to brief ministers on the status of the Doha Round and discuss possible next steps. He informed them of his plan to hold a Trade Negotiations Committee (TNC) session on 31 May to take stock of his consultations with governments and "chart a path forward." Lamy said that signals from APEC and the upcoming Paris meeting of ministers on the sidelines of an Organisation for Economic Cooperation and Development (OECD) summit would be "key inputs into that process." The Paris ‘mini-ministerial', on 26 May, will be hosted by Australia, and attended by dozens of influential WTO members. Geneva-based trade diplomats from several governments are reportedly travelling to the French capital for the meeting.

Summing up the discussions at the APEC meeting, US Trade Representative Ron Kirk said that "all ministers agreed that we cannot simply keep doing what we have been doing in the Doha talks if we mean to move forward. At the same time, not one minister said we should throw in the towel. We should, instead, start a sober assessment of next steps."

Earlier, in his opening remarks to the conference, Kirk had argued that "without abandoning our commitment to the success of the Round, we need to begin a hard-nosed discussion of what can be done. We need to explore what ‘next steps' we can take to find a more productive path - and, if we find that path, to take it as quickly as possible."

He suggested that this process would require "deep reflection," and could be linked to a WTO Ministerial Conference planned for December in Geneva. He said that governments faced "three possible paths: keep doing what we have been doing, give up, or start thinking of something different that will lead us in a better direction."

The US trade chief said that optimism early this year about prospects for a Doha agreement had "not been borne out," and intensive discussions had served mainly to clarify "just how far apart we are on the core question of market access ambition - certainly in NAMA [non-agricultural market access], but also with regard to services and agriculture."

The main obstacle in the negotiations is a deep divide between the US and large developing countries over the depth of tariff cuts to result from a Doha accord. China, India, and Brazil have consistently rejected Washington's demands for substantial new concessions in terms of access to their markets, particularly for industrial products, as unrealistic and disproportionate to the tariff and subsidy reforms rich nations have offered. The US, on the other hand, feels that the terms on the table in the Doha Round negotiations are biased against its interests.

The Wall Street Journal reported from Big Sky that US business leaders attending the conference had started to suggest that the Doha Round talks could be "put on ice," while the Obama administration pursues more promising deals on specific sectors or with individual countries or small blocs. It quoted a senior US official as saying that ministers had privately acknowledged the need to end efforts to reach a comprehensive multilateral agreement and focus instead on "alternatives." However, they were far from deciding which areas to pursue - a choice that some trade officials and observers in Geneva have suggested might prove as contentious as concluding a comprehensive deal. Possible candidates for stand-alone accords include trade facilitation and duty- and quota-free access for products from least-developed countries (LDCs).

The spotlight on the Doha Round negotiations for the past decade has obscured the WTO's other functions, such as administering existing multilateral trade rules, resolving disputes, and monitoring countries' trade policies. Faced with the possibility that the talks could end without an agreement, ministers took pains to emphasise that the global trade body was much more than an interminable negotiation.

"Wherever we go next, I think it's critical to emphasize one point - the WTO is strong, as it has shown itself to be in the past three years," Kirk said to the conference. "We have confidence in it. And we need to be very careful about absolutely equating ‘the WTO' and ‘the Doha Round.'"